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ABC Corp was created from the combination of two smaller companies two years ago. Selected information is as follows, in millions except percentages: FCF current
ABC Corp was created from the combination of two smaller companies two years ago. Selected information is as follows, in millions except percentages: FCF current year: $350 WACC: 9.5% Constant growth rate: 2.5% Short-term investments: $7 Debt: $52 Preferred stock: $12 Number of common stock shares: 25 A. Show calculations for ABCs value of operations. B. Show calculations for ABCs estimated intrinsic stock price. C. Which would have the larger effect on your answer in B, a $50 increase in FCF or a 1% decrease in WACC? Show calculations.
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